How ChatGPT, Bard And AI Rivals Are Shaping Layoffs And Hiring

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In every downturn, we tend to measure the pain by counting layoffs. (Dell is the latest, announcing it will cut 6,650 jobs or 5% of its workforce.) According to Layoffs.fyi, a smart if incomplete tracker of job cuts, tech companies laid off almost 95,000 workers in the first five weeks of this year, which is already about 60% of the layoffs it reported for all of 2022.

While job cuts are normal, there’s something different about this economic dip. To start, as Jena McGregor reports, the advent of remote work has cemented the digital pink slip. There’s also not a lot of correlation between layoffs and profitability: companies like Google, Microsoft, and Amazon aren’t exactly hurting at the moment. The mantra is more about rightsizing than profitability. Never mind that research has long challenged the financial logic of firing a wide swath of workers and suggests that it’s harmful to productivity.

Pressure for these layoffs seems to be coming mainly from activist investors and falling share prices–at least as far as the top guns of tech are concerned. That’s not new as the high price/earnings ratios and mediocre dividends of most tech stocks make them look a lot less attractive to shareholders during inflationary periods, not to mention making it harder to borrow and pay down debt. So headcount and salaries do become a real issue.

The AI Elephant In The Room

Look at where many of those cuts are being made. Sales, recruiting, and marketing tend to be disproportionately targeted. Programmers and high-priced veterans seem vulnerable. Meanwhile, the CEOs of Microsoft and Google are among the many who are touting massive new investments within days of announcing massive job cuts.

The virtual elephant in the room is generative AI, algorithms that generate fresh images, sounds and content that dazzlingly–and often disturbingly–ends up being as good or better than what humans can create on our own. The most heralded of the bunch thus far–not to mention the fastest-growing consumer internet application in history, with more than 100 million users—is ChatGPT. Launched by OpenAI in November 2022, the chatbot is editing research papers, passing business school exams, composing music and proving to be a terrific customer-service rep, coder, marketer and therapist to all. (Hey chatbot, any suggestions for this article or ways to destroy you? Oh, and please don’t tell my boss.)

For an excellent primer on how ChatGPT and other AI offerings are about to change the way you work, check out this feature by Alex Konrad and Kenrick Cai. In this conversation for Forbes Talks, Kenrick talks about why his sources feel we’re at a profound tipping point. Microsoft cofounder Bill Gates tells Alex that, last summer, ChatGPT parent OpenAI “showed me progress that I really was surprised to see.” (Microsoft recently invested $10 billion in OpenAI, by the way.)

Google Finds Its Bard

Now that Google is getting into the game with a rival chatbot named “Bard,” we may be headed to a new playing field altogether. Along with potentially revolutionizing how we search for information–which, let’s admit, can sometimes feels as ham-handed as ChatGPT’s ability to compose limericks–this battle of the titans will likely bring a number of ethics and legal concerns to the fore.

How companies downsize is less intriguing than how they later build themselves back up. Iconic leaders like Jack Welch and Steve Jobs understood and seized the opportunity to reinvent their companies during tough times. Those that choose to ignore the power of new AI tools may not last long enough to get to that point.

There will be new jobs created and many that could be permanently disrupted, perhaps reviving debates about universal incomes and pressure for skills training. Advanced AI gives better tools to hackers and other criminals, too. If the opportunities and threats are managed well, we could all end up in a better place. If not, the disruption could be destructive. Leadership matters, especially in times like these.